Have you experienced a “dry promotion” lately? Or even heard of it? It is when an employee receives a new title or gets additional responsibilities without seeing a pay increase.
According to a recent survey as reported by HRD, nearly four in 10 employees in Australia have witnessed or experienced “dry promotion” in the workplace!
After a very slow financial year, many companies are choosing to promote their staff with new titles, but no extra pay. Reputational and personal branding gain but financial pain.
25% of staff in Australia have recently reported receiving a “dry promotion” in the past year, with many accepting the promotion to secure their jobs in the current financial climate.
Is this fair/not fair? Why exactly is it all happening?
This practice is becoming more widespread as companies face budget constraints or seek to retain Talent without increasing payroll expenses. By offering a “dry promotion” it’s more of a kind of IOU to hold onto Talent so they don’t explore other work avenues.
Employers are saying: ‘Stick with us and you’ll be rewarded financially, but not just now’.
But the issue remains – how long can an employee wait?
Adding to this is Erin Devlin, managing director of people2people Recruitment, who explains: “Employees may be accepting dry promotions because they ‘feel cornered’ by rising costs and job security”.
“Employers must tread carefully, as repeated reliance on dry promotions can erode trust and lead to higher turnover,” she says.
A few solutions to appease all are offering other guarantees such as a bonus or revenue sharing. Even more flexibility when it comes to working hours, like an increase in holidays, more WFH, and paid sabbaticals.
What this does is make the employee feel loved and respected, knowing that this is enough until the actual pay increase kicks in, but it’s all a delicate balance.
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